UK manufacturing at 10-year high

European demand has boosted manufacturing results

British manufacturing has seen its best results in a decade in the first three months of the year, says a report.

The rise in manufacturing and engineering output was buoyed by export growth, according to the Engineering Employers Federation (EEF).

The past quarter was distinguished by a notable upturn in demand from Europe, said the EEF.

Its figures echo other recent data, which has shown similar positive patterns of demand in manufacturing.

European demand

The latest results showed that the balance of exports rose in the last quarter to its highest level since the middle of 1995.

The balance of domestic orders was less spectacular, however, staying at the same as the previous quarter.

Our survey shows that manufacturers are making the most of a strong global economy Steve Radley, EEF chief economist

Steve Radley, the EEF's chief economist, told the BBC that European markets had picked up, having "previously seemed moribund".

"Our survey shows that manufacturers are making the most of a strong global economy, with exports, investment and employment all expanding," he said.

The survey also revealed that more companies saw increases in employment rather than job cuts in the past quarter and that employment prospects were positive for the first time in a year.

Rates decision

Business will be closely watching the Bank of England this week as its Monetary Policy Committee meets to review interest rates.

"The domestic market remains subdued, suggesting that the Monetary Policy Committee should hold off from raising interest rates," Mr Radley said.

But he emphasised that a rate increase "would not be enough to destabilise recovery in manufacturing".

"Business wants stability and if a small increase is required to prevent a bigger one further down the line, that's acceptable."